DoD's $21.9M machinery repair contract with Primetech International shows fair value despite limited competition

Contract Overview

Contract Amount: $21,907,479 ($21.9M)

Contractor: Primetech International, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-09-13

End Date: 2014-09-19

Contract Duration: 1,102 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SERVICES, NONPERSONAL

Place of Performance

Location: ALBANY, DOUGHERTY County, GEORGIA, 31704, UNITED STATES OF AMERICA

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $21.9 million to PRIMETECH INTERNATIONAL, INC. for work described as: SERVICES, NONPERSONAL Key points: 1. Contract value of $21.9M over three years suggests a moderate annual spend. 2. Primetech International, the sole awardee, indicates potential for limited market competition. 3. The contract's Time and Materials (T&M) pricing structure can pose cost control risks. 4. Performance period of over three years allows for sustained service delivery. 5. The contract falls within the Commercial and Industrial Machinery repair sector. 6. Awarded by the Department of the Navy, it supports critical operational readiness.

Value Assessment

Rating: fair

The contract's total value of $21.9 million over approximately three years averages around $7.3 million annually. Benchmarking this against similar large-scale industrial machinery repair and maintenance contracts is challenging without more specific service details. However, the Time and Materials (T&M) pricing model, while flexible, often carries a higher risk of cost overruns compared to fixed-price contracts. The absence of a specific ceiling price in the provided data makes a precise value-for-money assessment difficult, but the duration suggests a need for consistent service.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which implies that while competition was sought, certain sources were excluded, leading to a limited pool of bidders. The data indicates six bidders participated, suggesting a moderate level of interest. However, the specific reasons for excluding other potential sources are not detailed, which could impact price discovery and potentially lead to less competitive pricing than a truly open competition.

Taxpayer Impact: The limited competition, even with six bidders, may mean taxpayers did not benefit from the lowest possible prices that a broader, unrestricted competition might have yielded.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational units, ensuring the readiness and functionality of critical machinery. Services delivered include repair and maintenance for commercial and industrial machinery and equipment. The geographic impact is likely concentrated around Navy installations where the machinery is located, primarily in Georgia (SN: GEORGIA). Workforce implications include employment for skilled technicians and support staff required for machinery repair and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely managed.
Limited competition after exclusion of sources may result in higher prices than a fully open competition.
Lack of specific performance metrics or KPIs in the provided data makes assessing service effectiveness difficult.

Positive Signals

Awarded to Primetech International, Inc., a known entity in the sector.
Contract duration of over three years allows for stable service provision and relationship building.
The contract supports critical Department of Defense operational needs.

Sector Analysis

This contract falls within the Commercial and Industrial Machinery and Equipment Repair and Maintenance sector, a vital segment supporting various industries, including defense. The North American Industry Classification System (NAICS) code 811310 covers establishments primarily engaged in repairing and maintaining industrial, commercial, and similar machinery and equipment. Spending in this sector is substantial across government and private industry, driven by the need to maintain aging equipment and ensure operational efficiency. Comparable spending benchmarks would depend heavily on the specific types of machinery and the scope of maintenance required.

Small Business Impact

The provided data indicates that small business participation (SB: false) and set-asides (SS: false) were not factors in this specific award. Therefore, this contract did not directly contribute to small business contracting goals or subcontracting opportunities through set-asides. The implications for the small business ecosystem are minimal, as the award went to a presumably larger entity capable of fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Accountability measures would be tied to the contract's performance clauses, delivery schedules, and adherence to the Time and Materials pricing structure. Transparency is facilitated through contract databases like FPDS, but detailed operational oversight and Inspector General jurisdiction would depend on specific contract clauses and any identified performance issues or fraud concerns.

Related Government Programs

Defense Logistics Agency (DLA) support services
Naval Sea Systems Command (NAVSEA) maintenance contracts
Industrial equipment repair services
Government maintenance, repair, and operations (MRO)

Risk Flags

Potential for cost overruns due to T&M pricing
Limited competition may lead to suboptimal pricing
Lack of detailed performance metrics in provided data

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.9 million to PRIMETECH INTERNATIONAL, INC.. SERVICES, NONPERSONAL

Who is the contractor on this award?

The obligated recipient is PRIMETECH INTERNATIONAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $21.9 million.

What is the period of performance?

Start: 2011-09-13. End: 2014-09-19.

What is the track record of Primetech International, Inc. with government contracts, particularly within the Department of Defense?

Primetech International, Inc. has a history of securing government contracts, including those with the Department of Defense. While the provided data highlights this specific $21.9 million contract for machinery repair, a comprehensive analysis would require examining their full contract portfolio. This includes reviewing past performance evaluations, any contract disputes or terminations, and their success rate in competing for similar service contracts. Understanding their experience with Time and Materials (T&M) contracts and their ability to manage costs effectively under such structures is crucial. Their performance on this specific Navy contract, awarded in 2011 and ending in 2014, provides a data point, but a broader look at their overall federal contracting history would offer a more complete picture of their reliability and capabilities.

How does the average annual value of this contract compare to similar machinery repair contracts awarded by the Navy or other DoD branches?

The average annual value of this contract is approximately $7.3 million ($21.9M / 3 years). Comparing this to similar contracts requires access to a broader dataset of Navy and DoD machinery repair and maintenance awards, categorized by the type of machinery, scope of services, and contract type. Contracts for specialized military equipment repair might command higher annual values due to complexity and security requirements, while general industrial machinery repair might fall within this range. The Time and Materials (T&M) nature of this contract also influences its value, as T&M contracts can fluctuate more than fixed-price agreements. Without specific benchmarks for comparable services and equipment, it's difficult to definitively state if $7.3 million annually represents a high, low, or average spend for this type of support.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk associated with the Time and Materials (T&M) pricing structure is the potential for cost overruns. Unlike fixed-price contracts where the contractor assumes the risk of cost increases, T&M contracts allow the contractor to bill for direct labor hours at specified hourly rates and for the actual cost of materials used. If the scope of work is not clearly defined, or if the contractor's efficiency is low, the total cost can escalate significantly beyond initial estimates. For the government, this necessitates robust oversight to ensure labor hours are reasonable and necessary, and that material costs are fair. Without a ceiling price or strong management controls, T&M contracts can become more expensive than anticipated, impacting the overall value for taxpayers.

Given the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' award type, what does this imply about the market for industrial machinery repair services for the Navy?

The award type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests that while the initial intent was to allow all responsible sources to compete, certain entities were subsequently excluded from the bidding process. This could be due to various reasons, such as specific technical requirements, security clearances, or pre-qualification criteria that only a limited number of firms met. It implies that the market for these specific Navy industrial machinery repair services might be specialized or consolidated, with fewer companies possessing the necessary capabilities or certifications. The participation of six bidders indicates some level of market interest, but the exclusions suggest potential barriers to entry for other qualified firms, potentially limiting the breadth of competition and its downward pressure on prices.

How has federal spending on industrial machinery repair and maintenance (NAICS 811310) trended over the past decade, and where does this contract fit in?

Federal spending on industrial machinery repair and maintenance (NAICS 811310) has generally remained a consistent, albeit significant, component of government procurement, particularly within defense and infrastructure sectors. Over the past decade, spending has likely fluctuated based on defense budgets, infrastructure investment initiatives, and the aging of government-owned equipment fleets. This $21.9 million contract, awarded between 2011 and 2014, represents a substantial single award within this category during its performance period. It fits within the broader trend of the government outsourcing maintenance and repair services to specialized contractors to ensure operational readiness and manage complex equipment lifecycles, reflecting a common strategy across various agencies needing specialized technical support.

Industry Classification

NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1803 SWIFT, NORTH KANSAS CITY, MO, 64116

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $21,967,998

Exercised Options: $21,907,479

Current Obligation: $21,907,479

Contract Characteristics

Cost or Pricing Data: NO

Timeline